Shree Parvati Metals V. Union of India Through Commissioner of Central Excise, NCRB, Statue Circle, Jaipur-I and Customs, Central Excise and Service Tax Appellate Tribunal, R.K. Puram, New Delhi

EXCIA/62/2016

AI Insights

The case involves Shree Parvati Metals, the appellant, challenging the decision of the Customs, Central Excise and Service Tax Appellate Tribunal, which had dismissed their appeal regarding the disallowance of CENVAT credit. The primary legal issue was whether the statement of a foreman, used against the appellant without allowing cross-examination, and the proprietor's statement, which allegedly lacked consideration of corroborative evidence, were admissible. The High Court of Rajasthan found that the denial of cross-examination constituted a violation of natural justice, necessitating a remand to the Tribunal for further proceedings.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 809753 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 06-12-2017
• Assessment Year: misc
• Other Referred Cases: Dharampal Satyapal Ltd. 2015 (8) SC 519, CCE Nagpur Vs. Ballarpur Industries 2007 (215) ELT 489 (SC), Commr. of C. Ex., Cus. and Ser. Tax, Daman vs. Nissan Thermoware P. Ltd., 2011 (266) E.L.T. 45 (GUJHC), Andaman Timber Industries vs. Commissioner of C. Ex., Kolkata-II, 2015 (324) E.L.T. 641 (SC), NGA Steels (P) Ltd. vs. The Customs Excise and Service Tax Appellate Tribunal and Ors. 2016 (339) E.L.T. 217 (Mad.), Mulchand M. Zaveri vs. Union of India, 2016 (339) E.L.T. 364 (GUJHC), Commissioner of Central Excise vs. Kurele Pan Products P. Ltd., 2014 (307) E.L.T. 42 (ALLHC), Vikram Cement (P) Ltd. vs. Commissioner of Central Excise, Kanpur, 2014 (303) E.L.T. A82 (CESTAT \\u2013 Delhi), Commissioner of Central Excise and Customs, Surat-II vs. Manikchand G. Sharma, 2010 (257) E.L.T. 87 (GUJHC), Commissioner of C. Ex. vs. Quality Exports and Chemicals (2015 (319) E.L.T. 243 (SC), Commissioner of C. Ex., Ahmedabad-II vs. Tejal Dyestuff Industries, 2009 (234) E.L.T. 242, Commissioner of Central Excise vs. Tejal Dyestuff Industries, 2009 (234) E.L.T. 242, Commissioner of Central Excise, Ahmedabad-II vs. Tejal Dyestuff Industries, 2009 (234) E.L.T. 242, Commissioner of Central Excise and Customs, Surat vs. Suresh Synthetics, 2016(332) E.L.T. 385 (S.C.)
• Laws Referred To: Central Excise Act, 1944
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KINSHUK JAIN
• Assessee Lawyers: PRIYESH KASLIWAL
• Keywords: CENVAT credit; Clandestine manufacture and removal; Cross Examination; Cross-examination; Disallowance of CENVAT Credit
• Section: 14

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Central/Excise Appeal No. 62 / 2016 Shree Parvati Metals, Through Surendra Chauhan Proprietor, E-6, RIICO Industrial Area, Bhiwadi, Distt. Alwar ----Appellant Versus 1. Union of India Through Commissioner of Central Excise, NCRB, Statue Circle, Jaipur-I 2. Customs, Central Excise and Service Tax Appellate Tribunal, R.K. Puram, New Delhi ----Respondents _____________________________________________________ For Appellant(s) : Mr. Priyesh Kasliwal For Respondent(s) : Mr. Kinshuk Jain _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 06/12/2017 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the assessee. 2. This court while admitting the appeal on 04.10.2017 framed the following question of law:- “Whether statement given by the foremen dated 07.12.2006 be used against the appellant without affording the opportunity of cross examining, while holding disallowance of cenvat credit of Rs. 10,27,545 and the statement of the properietor of the firm without considering the corroborative evidence as were available on record as such conclusion arrived at by the tribunal can aid to the proper?” (2 of 20) [EXCIA-62/2016] 3. Learned counsel for the appellant has take us to the order of first authority where in it has been observed as under:- (x). The noticee submitted that Show Cause Notice is also placing reliance on the statement of Shri Naresh Singh Foreman of the Noticees Company. The noticees demanded cross examination of Shri Naresh Singh and another time of 15 days after cross examination for submission of Final Reply. 4. Further he has taken us to clause 4 of the order of First Authority which reads as under:- (iv). The noticee submitted that Show Cause Notice is also placing reliance on the statement of Shri Naresh Singh Foreman of the Notices Company. The notices demanded cross examination of Shri Naresh Singh and another time of 15 days after cross examination for submission of Final Reply. I find that Shri Naresh Singh Foreman was employee of the noticee and there appears no reason to allow cross examination of their own employee by them. 5. Thereafter the ground was denied which can be established from the record. 6. He has further taken us to the order of the Tribunal where Paragraph 4 and 5 it has been observed as under:- “4. I have considered the submissions from both sides and perused the records. 5. As regards the cross-examination of Shri Naresh Singh, Foreman is concerned, it is settled law that if the statement of the person is relied upon and the appellant seeks cross-examination of that person, it is to be allowed if not allowing cross-examination will cause prejudice to the appellant (Supreme Court judgments in the case of Dharampal Satyapal Ltd. 2015 (8) SC 519 refers). As the statement of Shri Naresh Singh is relied upon against the appellant not allowing his cross-examination does cause prejudice to the appellant and therefore in the absence of his (3 of 20) [EXCIA-62/2016] cross-examination, Shri Naresh Singh’s statement cannot be used as evidence against the appellant (Refer SC judgment in the case of CCE Nagpur Vs. Ballprpur Industries 2007 (215) ELT 489 (SC)). However, I find that the proprietor himself and categorically admitted in his statement dated 7.10.2006 that he never received any coil or plates of thickness below 10mm in his factory. There was no retraction of the statement nor any allegation that the same was obtained under duress. Not only that in his subsequent statement recorded much later on 2.4.2008, he reiterated that coils of thickens below 10mm were never received in his factory. The second statement also was never retracted. Thus proprietor’s statements are of full evidentiary value. His statements fully and decisively establish the alleged offence. The Chartered Engineer Certificate produced by the appellant merely states as under: This is to certify that M/s. Shree Parvati metals, E-6, RIICO Industrial Area, Bhiwadi is a registered manufactures of different type of machines such as Hydraulic Presses. Mechanical machines & other in which they use various type of Principle Raw materials As CR Sheets, HR Sheets, M.S. Sheets of various thickness i.e. 2mm ot 100mm. I have visited their factory premises and saw all the process. The verification of raw material the Bills and Photograpsh are attached with the certificate. Place: Bhiwadi Date: 12.08.2008 Signature & Seal of Chartered Engineer Name: A.K. Khanna Registration No: M-10672/91995 Registered with: Institute of Engineers (India) The certificate is dated 12/08/2008 while the period covered in this case is 2005-06 to 2006- 07. The certificate does not certify that the appellant was receiving coil below 10mm during the relevant period. 7. Counsel for the appellant has taken us to the various Judgments of Different High Courts wherein following principles have been laid down:- “2. In Commr. of C. Ex., Cus. and Ser. Tax, Daman vs. Nissan Thermoware P. Ltd., 2011 (4 of 20) [EXCIA-62/2016] (266) E.L.T. 45 (GUJHC), it has been held as under :- 1. In this appeal Under Section 35G of the Central Excise Act, 1944 (the Act), the Commissioner, Central Excise, Customs and Service Tax, Daman has challenged order dated 25th March, 2009 2009 (246) E.L.T. 191 made by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) proposing the following two questions: 1. Whether the learned Tribunal is right in law in holding that the clandestine manufacture and removal of final product by the Assessee company was not proved in view of absence of independent evidence and was right in allowing appeal extending the benefit of doubt to the Appellant when the raw material noticed was short of the statutory record which was noticed in presence of independent panch witness? 2. Whether the learned Tribunal is right in allowing the appeal though the raw material which was being noticed as short and the resultant excisable manufacture goods were removed without account, without producing C. Ex. Invoices and without payment of C. Ex. Duty, as admitted by the director of Assessee Unit? 3. The Respondent Assessee is engaged in the manufacture of water bottles, water jugs, casseroles and tiffins etc. of insulated were falling under Chapter 39 of the Central Excise Tariff Act, 1985. The Central Excise officers during physical verification of the stock of raw materials while conducting preventive checks at the factory premises of the Assessee, found shortage of 9975 kgs. HD as compared to the stock shown in RG-23A, (5 of 20) [EXCIA-62/2016] Part-I Register. The Director of the Company admitted the use of the same in the manufacture of water jugs which had been cleared clandestinely without payment of duty. The Assessee also debited duty payment of Rs. 1,23,464/- in its MODVAT account. Pursuant to the aforesaid, a show cause notice came to be issued to the Assessee, which culminated into an order made by the adjudicating authority confirming the duty and the penalty on the Assessee and personal penalty of the Director. The Assessee as well as the Director carried the matter by filing separate appeals before the Commissioner (Appeals) who vide order dated 15th February, 2008 dismissed the appeals. Both the Assessee as well as the Director preferred separate second appeals before the Tribunal, which came to be allowed vide a common order. 4. Ms. Nayna Gadhvi, learned Standing Counsel for the Appellant as-sailed the impugned order of the Tribunal submitting that the Director of the Respondent during the course of preventive checks had admitted before the panchas that the raw material to the extent of the shortage noticed was used in the manufacture of various exportable goods and sold out in the open market in April to June, 1996 and had admitted the offence of illicit clearance committed by the Assessee. It was submitted that in the light of the aforesaid admission made on behalf of the Assessee which statement had not been retracted, the Department was not required to prove clandestine removal inasmuch as the facts stood admitted by the Assessee itself. In support of her submission, the learned Counsel placed reliance upon the decisions of the Apex Court in the case of Commissioner of C. Ex., Madras v. Systems & Components Pvt. Ltd. : 2004 (165) E.L.T. 136 as well as in the case of K.I. Pavunny v. Asstt. Collr. (HQ.), C. Ex. Collectorate, Cochin : 1997 (90) E.L.T. 241 . Attention was also invited to the order made by the Commissioner (Appeals) to point out that the raw material of which there was shortage was a raw material which was required in large quantities whereas the other inputs were required in small quantity hence, it was not possible for the Assessee to manipulate (6 of 20) [EXCIA-62/2016] the shortage of HD as the same was required in bulk. It was submitted that in light of the facts and circumstances of the present case, the Tribunal was not justified in giving the Assessee the benefit of doubt as regards clandestine removal. It was, accordingly, submitted that the appeal requires consideration and the questions, as proposed or as may be deemed fit, be formulated by the Court. 7. Thus, on the basis of findings of fact recorded by the Tribunal upon appreciation of the evidence on record, it is apparent that except for the shortage in raw material viz., HD which was disputed by the Assessee and the statement of the Director, there was no other evidence on record to indicate clandestine manufacture and removal of final products. On behalf of the revenue, except for placing reliance upon the statement of the Director recorded during the course of the search proceedings, no evidence has been pointed out which corroborates the fact of clandestine manufacture and removal of final products. In the circumstances, on the basis of the material available on record, it is not possible to state that the Tribunal has committed any legal error in giving benefit of doubt to the Assessee. 8. The decision of the Apex Court in the case of Commissioner of C. Ex., Madras v. Systems & Components Pvt. Ltd. (supra) does not carry the case of the revenue any further inasmuch as in facts of the said case the Tribunal has held that the Department has not proved that the parts in question were specifically designed for manufacture of Water Chilling Plant in question. The Assessee had specifically provided technical details stating that the parts in question were used in the Chilling Plant. The Court held that once it is an admitted position by the party itself, that these are parts of a Chilling Plant and the concerned party does not even dispute that they have no independent use there is no need for the Department to prove the same. It is a basic and settled law that what is admitted need not be proved. The said decision would not have any applicability to the facts of the present case as the Assessee has disputed that there was a (7 of 20) [EXCIA-62/2016] shortage of raw material or that there was clandestine manufacture or removal. The decision of the Supreme Court in the case of K.I. Pavunny v. Asstt. Collr. (HQ.), C. Ex. Collectorate, Cochin (supra), also would not be applicable to the facts of the present case. In the said decision the Court held thus: It is the duty of the prosecution to prove the case beyond reasonable doubt. The evidence may consist of direct evidence, confession or circumstantial evidence. In a criminal trial punishable under the provisions of the IPC, it is now well settled legal position that confession can form the sole basis for conviction. If it is retracted, it must first be tested whether confession is voluntary and truthful inculpating the accused in the commission of the crime. Confession is one of the species of admission dealt with Under Sections 24 to 30 of the Evidence Act and Section 164 of the Code. It is an admission against the maker of it, unless its admissibility is excluded by some of those provisions. If a confession is proved by unimpeachable evidence and if it is of voluntary nature, it when retracted, is entitled to high degree of value as its maker is likely to face the consequences of confession by a statement affecting his life, liberty or property. Burden is on the accused to prove that the statement was obtained by threat, duress or promise like any other person as was held in Bhagwan Singh v. State of Punjab - : AIR 1952 SC 214, Para 30. If it is established from the record or circumstances that the confession is shrouded with suspicious features, then it falls in the realm of doubt. The burden of proof on the accused is not as high as on the prosecution. If the accused is able to prove the facts creating reasonable doubt that the confession was not voluntary or it was obtained by threat, coercion or inducement etc., the burden would be on the prosecution to prove that the confession was made by the accused voluntarily. If the Court believes that the confession was voluntary and believes it to be true, then there is no legal bar on the Court for ordering conviction. However, rule of prudence and practice does require that the Court seeks corroboration of the retracted confession from other evidence. The confession must be one inculpating the (8 of 20) [EXCIA-62/2016] accused in the crime. It is not necessary that each fact or circumstance contained in the confession is separately or independently corroborated. It is enough if it receives general corroboration. The burden is not as high as in the case of an approver or an accomplice in which case corroboration is required on material particulars of the prosecution case. Each case would, therefore, require to be examined in the light of the facts and circumstances in which the confession came to be made and whether or not it was voluntary and true. Thus, the said case deals with a confessional statement of an accused in criminal proceedings, which cannot be put on a par with a statement recorded during preventive checks. 9. In the circumstances, there being no infirmity in the impugned order of the Tribunal, the same does not give rise to any question of law so as to warrant interference. The appeal is, therefore, dismissed. 3. In Andaman Timber Industries vs. Commissioner of C. Ex., Kolkata-II, 2015 (324) E.L.T. 641 (SC), it has been held as under :- 6. According to us, not allowing the Assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the Assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the Assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal (9 of 20) [EXCIA-62/2016] has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the Appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the Appellant wanted to cross-examine those dealers and what extraction the Appellant wanted from them. 7. As mentioned above, the Appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross- examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3-2005 [2005 (187) E.L.T. A33 (S.C.)] was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notice. 4. In NGA Steels (P) Ltd. vs. The Customs Excise and Service Tax Appellate Tribunal and Ors. 2016 (339) E.L.T. 217 (Mad.), it has been held as under :- 10. After going through the impugned order made in appeal No. E/40772/2014 dated 02.11.2015 of the CESTAT, Chennai, we find that the plea regarding violation of principles of natural justice, in not permitting the appellant to cross examine (10 of 20) [EXCIA-62/2016] the persons from whom statements were recorded / witnesses, has not been dealt with and answered, by the tribunal. 11. Mr.V.Sundareswaran, learned counsel for the Revenue / 2nd respondent, is also not in a position to point out as to whether CESTAT, Chennai, has adverted to the said plea. But, sought to justify the orders passed by the authorities including CESTAT, Chennai, contending that when burden is discharged by the department, there is no need to permit cross examination. On the facts and circumstances of the case, we are of the view that when a specific plea regarding violation of principles of natural justice is raised, CESTAT, Chennai, is bound to record a specific finding, which is conspicuously absent. 5. In Commissioners Central Excise vs. Kurele Pan Products P. Ltd., 2014 (307) E.L.T. 42 (ALLHC), it has been held as under :- 5. We do not find substance in the arguments of the learned counsel for the appellants. From the record, it reveals that the first date was fixed on August 24, 2009. On September 17, 2009 the respondent wrote a letter to the Department asking for the copy of the relied upon documents and the statements of the witnesses. The next date fixed was September 24, 2009. On October 22, 2009 the copies of the statements and the relied upon documents have been provided to the respondent. On the receipt of such documents, the respondent filed the reply on November 17, 2009 and requested for cross-examination of the witnesses, whose statements were sought to be relied upon in the show-cause notice. The said request was within the reasonable time and cannot be said to be after unreasonable delay. November 20, 2009 was the date fixed. On November 19, 2009 again the request was made for giving the opportunity of cross-examination. On these facts, we are of the view that it cannot be said that there was any lapse on the part of the respondent. 6. It is a settled principle of law that if the authority wants to rely upon the statement of any witness, the opportunity of cross-examination ought to have been given to enable the party to prove its case. Non- providing of the opportunity of cross-examination amounts to violation of the natural justice and in the absence of denial of natural justice, such documents cannot be relied upon. In the case of Basudev Garg v. Commissioner of Customs : [2013] 21 GSTR 12 (Delhi) : [2013] 294 ELT 353 (Delhi), the Division Bench of the Delhi High Court has held that the statement against the assessee cannot be used without giving (11 of 20) [EXCIA-62/2016] them an opportunity of cross-examination. Cross- examination is valuable right of the accused/noticee in quasi-judicial proceeding, which can have adverse consequences for them. 6. In K. Srinivasulu vs. Commissioner of Customs 2017 (345) E.L.T., 477 (Mad.)m it has been held as under :- 4. In the light of the above facts and taking into consideration the earlier order passed by this court, the writ petition is allowed, and the impugned order is quashed and the respondent is directed to afford an opportunity of personal hearing, during which the petitioners can make a request to the respondent to provide an opportunity to cross-examine Mr. J. Thiyagarajan and G. Venkatesh of M/s. Surana Corporation, who are infact petitioners in the earlier writ petition, in the event, the respondent proposes to rely upon the statement recorded by them during the adjudication of show cause notice. The above writ petitions are allowed with the above directions. Consequently, connected miscellaneous petitions are also closed. No costs. 7. In Commissioner of Central Excise and Customs, Surat-II vs. Manikchand G. Sharma, 2010 (257) E.L.T. 87 (GUJHC), it has been held as under :- 6. The Tribunal after appreciating the evidence on record, found that the revenue had not put forward any corroborative evidence in support of the allegations made against the respondent. The Tribunal also found that the Commissioner had not at all considered the points put forth by the respondent, even though he had reproduced the submissions in his order and had also not commented upon the technical opinion of the Chartered Engineer submitted by the respondents. In view of the fact that except for the statement of authorized signatory, no other evidence was available as well as considering the technical opinion submitted by the respondents indicating that the anti static oil gets removed during the process of dyeing/twisting, the Tribunal came to the conclusion that no case of clandestine removal was made out against the respondents. 7. From the facts noted hereinabove, it is apparent that except for the admission on the part of authorised signatory, there is no other corroborative evidence to substantiate the allegation of clandestine removal against the respondents. The case of the revenue against the respondents is based upon the fact that though Anti-Static Oil sticks to the raw material so as to increase the weight of the finished product, there was (12 of 20) [EXCIA-62/2016] no corresponding increase in the weight of the finished product. As per the opinion of the Technical Expert, the Anti Static Oil gets removed during the process of dyeing and twisting. Nothing has been brought on record by Commissioner to disprove the said technical opinion. In the circumstances, it is apparent that when the Anti Static Oil gets removed during the aforesaid process, there would not be any increase in the weight of the finished material. Insofar as the admission on the part of Shri Modi, the authorised signatory is concerned, a perusal of the order of the adjudicating authority clearly indicates that it was the case of the respondents that Shri Modi used to always create problems for their unit and that they had a strong suspicion that he even used to steal from their unit. That, in this connection there was a bitter argument so he had turned revengeful and after landing them in all these troubles, he had left their service. Thus it is apparent that the Tribunal has taken into consideration all the relevant facts and evidences, including the evidence which has been ignored by the Commissioner, namely the report of the Technical Engineer. In the light of the aforesaid facts, considering the fact that except for the statement of the authorized signatory there is no other evidence to substantiate the allegation of clandestine removal, it cannot be stated that the Tribunal has committed any legal error so as to warrant interference. 8. In the circumstances, no question of law much less a substantial question of law can be stated to arise out of the impugned order of the Tribunal. The appeals are accordingly dismissed. 8. In Vikram Cement (P) Ltd. vs. Commissioner of Central Excise, Kanpur, 2014 (303) E.L.T. A82 (CESTAT – Delhi), it has been held as under :- 9. The issue required to be decided is as to whether the said statement alone can be made the basis for arriving at the finding of clandestine removal. What is evidentiary value of the said statement, in the absence of other corroborative evidence on record. The Hon'ble Delhi High Court in a recent judgment in the case of Commissioner of Income Tax v. Dhingra Metal Works has considered the evidentiary value of the statement of Director given at the time of search of the factory sought to be relied upon by the Revenue. While examining the evidentiary value of the said statement in the absence of any other evidence, the Hon'ble High Court observed that it is settled law that though the admission is extremely important piece of evidence it cannot be said to be conclusive and it is open to the person who has made the admission to show that this is incorrect. I also note that there are numerous decision of the Tribunal laying down that such admission of (13 of 20) [EXCIA-62/2016] shortages without there being any admission of clandestine removal, cannot be considered to be conclusive evidence to establish the guilt of the assessee. Burden of proof is on the Revenue and is required to be discharged effectively. Clandestine removal cannot be presumed merely because there was shortages of the stock or on the recovery of some loose papers. 9. In Mulchand M. Zaveri vs. Union of India, 2016 (339) E.L.T. 364 (GUJHC), it has been held as under :- 6. The only reasons given by the adjudicating authority for denying such cross-examination are that the witnesses have not retracted their statements. These statements made by the Customs authority which are admissible in evidence stand valid. He also opined that, in the notice he has not specified the facts which may be brought before the adjudicating authority subsequent to cross-examination of these witnesses if allowed. Both the reasons cited by the adjudicating authority are completely baseless. Merely because, the concerned witnesses have not retracted their statements would not be a ground to deny cross-examination. In fact, this reason does not even take care of the evidence of the expert witnesses. Further what material can the petitioner bring on record through cross-examination if so allowed, is simply not germane to the question of granting or not granting cross-examination. The adjudicating authority entered into an arena of presumption while refusing such request on such ground. 10. Commissioner of central excise vs. tejal dyestuff industries, 2009 (234) E.L.T. 242, it has been held as under :- 6. Thus, on an overall appreciation of the aforesaid evidence applying the test of preponderance of probability visa-vis the confessional statements it has been found by CESTAT that the conclusion of the adjudicating authority that Cenvat Credit claimed is inadmissible, is an incorrect conclusion not supported by the evidence on record. 7. The learned counsel for the appellant laid great emphasis on the inferences and findings recorded by the adjudicating authority and read extensively from the adjudication order to contend that CESTAT had committed an error in law by not appreciating the facts in correct perspective. 8. As can be seen from the impugned order of CESTAT and the adjudication order, it is a question of appreciating the same set of facts and evidence (14 of 20) [EXCIA-62/2016] available on record. The findings recorded by CESTAT summarized hereinbefore would go to indicate that the case put forth by the assessee is a plausible case and in the circumstances, in absence of any corroborative evidence brought on record by revenue, the findings recorded by CESTAT do not call for any interference. 9. In the aforesaid set of facts and circumstances of the case, none of the questions, as proposed in each of the tax appeals or otherwise, can be termed to be substantial questions of law. The appeals are accordingly dismissed. 10. commissioner of C. Excise, ahmedabad-II vs. tejal dyestuff industries, 2009 (234) E.L.T. 242, 28.07.2008 11. Commissioner of C. Ex. vs. Quality Exports and Chemicals (2015 (319) E.L.T. 243 (SC), it has been held as under :- 4. The High Court, no doubt, has remarked that the CEGAT did not look into the various documents which were produced by the Respondent and did not record the statement of the consignors and consignees who had given the affidavit, etc. To this extent, the High Court may be justified. However, if the matter was not dealt with by the CEGAT affirmatively, without scrutiny of the relevant documents, the only option for the High Court was to remit the case back to the authorities below for fresh consideration in the light of documents filed by the Respondent. On the contrary, the High Court proceeded to decide the issue on the premise that documents filed by the Respondent are authentic and treating the case put forth by the Respondent as gospel truth. That cannot be countenanced. 5. In such a situation, we feel that the matter should be relegated to the Commissioner for holding fresh enquiry after considering the documents produced by the Respondent and recording the evidence wherever it is required. 12. CCE vs. Gujarat Cypromet Ltd. 2007 (345) E.L.T. 520 (Guj.), it has been held as under :- 6. In the facts and circumstances of the case, we are of the opinion that th Tribunal committed no error. Learned counsel Mr. Darshan Parikh was unable to counter the observations of the Tribunal taht such cross- examination was asked for during the course of adjudication proceedings itself. If that be the position, when the Revenue is placing heavy reliance on certain statements of the witnesses recorded during the course of investigation, without there being anything peculiar, the noticees were well within their right to seek cross examination. (15 of 20) [EXCIA-62/2016] 9. Merely because the statements, according to the adjudicating officer, were recorded without threat, duress or coercion or that the witnesses at no stage retracted their statements, cannot be a ground for rejecting the request for cross-examination. 13. Commissioner of Central Ex. & Cus., Surat V/s. Suresh Synthetics 2016(332) E.L.T. 385 (S.C.) it has been held as under:- 7. It is noticeable that the High Court has accepted the technical report. It is submitted by Mr. Patwalia that the revenue had no occasion to contest the technical report. In our considered opinion, the revenue should have been afforded an opportunity to counter the technical report filed by the assessee by filing its technical report, for the whole controversy hinges upon the differential quantity and if there is any differential quantity, the issue of removal would arise. Regard being had to the same, we set aside the order passed by the High Court and that of the Tribunal and remit the mater to the Tribunal to permit the Revenue to file a technical report. If the Tribunal forms the view that there has to be further technical opinion, it may call for it or it may permit the parties to adduce further evidence to substantiate the plea. We may hasten to clarify that while dealing with the matter, the Tribunal shall not take into consideration the statement of the authorised officer alone. If there will be any differential quantity on the analysis of the aforesaid aspects, then the said statement can be pressed into service. We may further add that the tribunal shall not insist upon pre-deposit of the dues for hearing of the appeal. 14. Commissioner of C. Ex., Ahmedabad-II V/s. Tejal Dyestuff Industries 2009 (234) E.L.T. 242 (Guj.) it has been held as under:- 6. Thus, on an overall appreciation of the aforesaid evidence applying the test of preponderance of probability vis-a-vis statements it has been found by CESTAT that the conclusion of the adjucating authority that Cenvat credit claimed is inadmissible, is an incorrect conclusion not supported by the evidence on record. 7. The learned counsel for the appellant laid great emphasis on the inferences and findings recorded by the adjudicating authority and read extensively from the adjudication order to contend that CESTAT had committed an error in law by not appreciating the facts in correct perspective. 8. As can be seen from the impugned order of CESTAT and the adjudication order, it is a question of appreciating the same set of facts and evidence (16 of 20) [EXCIA-62/2016] available on record. The findings recorded by CESTAT summarized hereinbefore would go to indicate that the case put forth by the assessee is a plausible case and in the circumstances, in absence of any corroborative evidence brought on record by revenue, the findings recorded by CESTAT do not call for any interference. 9. I the aforesaid set of facts and circumstances of the case, none of the questions, as proposed in each of the tax appeals otherwise, can be termed to be substantial questions of law. The appeals are accordingly or dismissed. 15. Tejwal Dyestuff Industries V/s. Commissioner of C. Ex., Ahmedabad 2007(216) E.L.T. 310 (Tri, - Ahmd.) it has been held as under:- 4. The following defence submissions inter alia, were taken before the Commissioner : (a) Stock taking had not been done properly (b) The final product was not tested and therefore it was not open to the Department to rely on the secondary evidence (c) They produced along with their reply dated 23-3- 2005 technical opinion dated 13-3-2004 issued by Dr N.D. Jadav, Vadodara which support the case that LAB can be used in that manufacture. (d) The assessee had got their finished goods tested by extracting a small portion of 200 gms from the bag of seized goods and the test report so obtained clearly shows presence of LAB in the material (e) The departmental officer coerced Shri Nareshbhai F. Shah into making a statement that payment was received back in cash. (f) All the persons had retracted the statements within two days of recording of statement by filing affidavit before Notary Public. However, the said retraction affidavits were enclosed only along with their reply dated 23-3 2005. 16. Commissioner V/s. Vikram Cement (P) Ltd. - 2014 (303) E.L.T. A82 (All.) it has been held as under:- 9. The issue required to be decided is as to whether the said statement alone can be made the basis for arriving at the finding of clandestine removal. What is evidentiary value of the said statement, in the absence of other corroborative evidence on record. The Hon'ble Delhi High Court in a recent judgment in the case of Commissioner of Income Tax v Dhingra Metal Works has considered the evidentiary value of the statement of (17 of 20) [EXCIA-62/2016] Director given at the time of search of the factory sought to be relied upon by the revenue. While examining the evidentiary value of the said statement in the absence of any other evidence, the Hon'ble High Court observed that it is settled law that though the admission is extremely important piece of evidence, it cannot be said to be conclusive and it is open to the person who has made the admission to show that this is incorrect. I also note that there are numerous decision of the tribunal leying down that such admission of shortages without there being any admission of clandestine removal, cannot be considered to be conclusive evidence to established the guilt of the assessee. Burden of proof is on the revenue and is required to be discharged effectively. Clandestine removal cannot be presumed merely because there was shortages of the stock or on the recovery of some loose papers.” 8. Counsel for the appellant has also contended that the specific documents were placed before the Tribunal but those documents were not considered. 9. Counsel for the respondent has supported the order of the Tribunal and contended that in view of the admission of the owner, no purpose would be served by cross-examination of the Foreman where in it has been alleged that they have not used more than 10 MM coil or plates of thickness and they were entitled for CENVAT credit. 9.1 He also contended that the Tribunal while considering the evidence on record and the alleged report of charge handing over certificate is of 2008 whereas the period which is considered is 2005-06-07. 10. Taking into consideration he contended that the appeal deserves to be dismissed. 11. We have heard counsel for the parties. (18 of 20) [EXCIA-62/2016] 12. The question which comes for consideration is where while considering the matter the statement which was recorded of the Foreman whether the assessee is entitled for cross-examination or not while disallowing the CENVAT credit, proprietor of the firm which was considered on the basis of evidence available on record. Taking into consideration the judgment of various High Courts and Supreme Court as reproduced above, we are of the considered opinion that the cross-examination is a right of assessee. In this case there is ambiguity in the statement of employee. 13. Since in the show cause notice there is difference in statements of Foreman and Proprietor which reads as under: “3(ii) Shri Naresh Singh, Foreman of M/s SPM in his statement dated 07.12.2006 (RUD-2) recorded on spot under Section 14 of Central Excise Act 1944, interalia stated that:- (a) He was the foreman of M/s SPM for the last 10 years. He looked after the entire production activity of M/s SPM. M/s SPM was engaged in the manufacture of machineries. The raw materials i.e. rounds (EN9) and plates (10mm to 150mm) were used for manufacture of machineries. M/s SPM had not used MS Plate of thickness less than 10mm. (b) As per the requirement of the customer they used to manufacture machines on the basis of drawings prepared by him. (c) He used to place the requirement of the raW material required for manufacturing of the machines of Shri Surender Chauhan, the Proprietor of M/s SPM. (d) M/s SPM did not have the facility to cut/slit the HR Coils nor do they require such facility as HR Coils were not required for manufacture of such machines they used to manufacture. (e) Till that date they had not received any HR Coil. MS Plate of 10mm to 15mm and rounds (EN9) in M/s SPM. They cut MS Plate as per their requirement as they were receiving MS Plate of length ranging from 1 Mtr. To 5 Mtr. (19 of 20) [EXCIA-62/2016] 3(iii). Shri Surender Chauhan, Proprietor of M/s SPM in his statement dated 07.12.06 (RUD-3) recorded on the spot under Section 14 of Central Excise Act 1944 interalia stated that:- (a) He was the Proprietor of M/s SPM. M/s SPM was engaged in manufacturing of Engineering Machines for which the main raw materials were M.S. Plates, Rounds, and Bearings etc. M.S. Plates of thickness more than 20 mm were being used for manufacture of Engineering Machines,. On few occasions they had used M.S. Plates of thickness 16mm to 18mm but the percentage of such usage of M.S. Plates of thickness 16mm to 18mm was very rere. They had never used M.S. Plates below 16mm. (b) He had received M.S. Plate of thickness 20 mm and above from M/s Garg Ispat Udyog Ltd., Bhiwadi and M/s. J.D. Industries (India) Ltd., Bhiwadi under the invoices issued by them mentioning therein the description of goods as H.R. Slitted Coil. (c) He had availed the Cenvat credit of duty shown to have paid in the said invoices as Central Excise duty by M/s Garg Ispat Udyog Ltd, Bhiwadi and M/s J.D. Industries (India) Ltd., Bhiwadi because he had paid the full amounts as shown in those invoices. (d) The M.S. Plates they had received from M/s Garg Ispat were actually 1500mm X 2500 mm in size and were being dispatched by tractors. In their unit they had no facility to cut or slit the H.R. Coils. He could not say from where M/s Garg Ispat Udyog Ltd. had dispatched the M.S. Plate to them M/s Garg Ispat Udyog Ltd. used to send them M.S. Plate equivalent to the amount of goods as shown in the respective invoice. (e) He used to contact Shri J.D. Gupta or his son Shri Manish Gupta for procurement of M.S. Plates. (f) He had been shown the Central Excise invoice no.740 dated 05.12.2016 of M/s Garg Ispat Udyog Ltd., Bhiwadi under which he had received M.S. Plates of 16MM thickness of 1580Kg. Only as against the H.R. Slitted Coils of 4.375 MT so mentioned in the said invoice. In his statement he accepted above said facts.” 14. Thus, it is clear that the statement of Foreman requires cross-examination. (20 of 20) [EXCIA-62/2016] 15. In that view of the matter, the issue is required to be answered in favour of the assessee and against the department. 16. The matter is remitted back to the Tribunal with a view to have a cross-examination of the Foreman. It will be open for the parties to cross-examine the Foreman. 16. We make it clear that we have not decided any other point accept cross-examination nor disturbed any finding of any authority. 16.2 Issue is to be decided not solely on the basis of owner statement without thoroughly considering the corroborative piece of evidence which may be available, it will decide the case on the basis of law declared by different High Courts. 17. The appeal stands disposed of. (VIJAY KUMAR VYAS), J. (K.S. JHAVERI), J. B. M.G/Gourav/36 "